Obtain any permits your city or town requires. Call your utility company and have your yard flagged for utility locations. Determine that your shed site is not on any setbacks or easements.
Put on your safety gloves.
Lay out the shed and mark the corners. Add a 16-inch perimeter around the foundation. Use wood stakes and string.
Remove the grass within the perimeter. A shovel, sod cutter or garden tiller will work for this step.
Level the pad on which you'll build the shed. Use 2x4 lumber that is straight and a 4-foot level.
Dig a minimum of four post holes, one in each corner. The holes will act as piers and will keep the foundation from settling or heaving due to ground moisture and temperature. For larger sheds dig one every 5 feet on center and add a row down the center of the foundation. Make the post holes at least 2 feet deep. Check with your local planing and zoning department to determine the depth of the freeze zone. Make sure the piers go below the freeze zone.
For a wood foundation, place a 4x4 pressure-treated post into each hole. Have the post extend 2 feet above the ground. Use a string line to make sure the posts are in line and square. Level as you fill the piers with concrete. This will provide you a solid base for your shed's foundation.
For a concrete foundation, add cardboard pier tubes in each post hole. The cardboard pier tubes will act as a concrete form to raise the piers above ground level. Use a level and extend the tubes 6 inches above the ground level. Add rebar bent in a "L" shape before the concrete sets to tie the piers into the 4-inch concrete slab.
Place a piece of thick plastic or landscape fabric over the entire pad. Fill the pad with 4 inches of gravel. The pad is now ready for the foundation.